Perry’s Game-Changing Plan for Jobs and Growth

Townhall ^ | 10-28-2011 | Ken Blackwell

[smoothsailing]

October 28, 2011

Perry’s Game-Changing Plan for Jobs and Growth

By Ken Blackwell

10/28/2011

 

Editor's Note: This column was co-authored by Ken Klukowski, a columnist for the Washington Examiner.

Governor Rick Perry unveiled his plan for fundamental tax reform with an optional flat tax. This bold proposal for economic growth is a fiscal game-changer, and demonstrably superior to the proposals of rivals Herman Cain and Mitt Romney.

In the 1990s, the National Commission on Economic Growth and Tax Reform (the Kemp Commission) chaired by the late Jack Kemp created the framework for a flat tax. This research was later refined and advanced by Steve Forbes, and the flat tax became central to his presidential campaign.

Since then the flat tax has caught on worldwide, especially in Eastern Europe. Fair and predictable, it has led to extraordinary growth. It removes government from the business of picking winners and losers, bringing everyone together to decide on a common tax rate.

Perry has made the flat tax a major proposal in his presidential campaign. It accomplishes the dual primary purposes of tax policy: raising revenue while optimizing economic growth.

The record of nations and states that adopt a flat tax proves its success in fueling prosperity. It does not punish success through progressive escalation of rates, and is stable and neutral in allowing private entities to freely make choices without government incentives or coercing decisions.

It is based on Ronald Reagan’s supply-side economic philosophy. By spurring economic growth, it increases government revenues. Coupled with cutting spending and a balanced budget constitutional amendment, the flat tax is a vehicle for ending our ruinous debt.

The flat tax also serves the secondary goal of helping the less fortunate. It allows a generous standard deduction and child tax credits to ensure that low-income Americans do not pay and working-income families would only pay modestly. It also rightly focuses on the family as the basic unit of taxation, rather than individuals.

The flat tax is eminently fair. Take Perry’s rate of 20%. The well-off truly pay their “fair share” and pay more than middle-income Americans, because 20% of rich is more than 20% of middle-income.

Perry also deals with the foreseeable questions about deductions for charitable giving and mortgages. While many taxpayers don’t itemize their taxes, millions do, and care about those deductions.

There are other popular deductions and credits, however. Excluding them will cause conflict with powerful interests. Voters will need to be persuaded why a flat tax is preferable.

Perry also extends this 20% rate to corporate taxes. This will make America significantly more competitive in the global economy. Temporary incentives will also draw perhaps a trillion dollars from abroad back home.

Contrast Perry’s flat tax with Cain’s 9-9-9 plan. Parts of the plan—such as requiring two-thirds congressional approval to raise taxes—are clearly unconstitutional. Other parts—such as taxing state and local governments—are likely unconstitutional.

Even if modified to make it constitutional, 9-9-9 is not conservative. It creates the risk of permanently burning the candle at both ends with an income tax and a European-style value-added tax. And it either imposes punitive taxes on the poor, or makes then forever beholden to the central government with monthly “prebate” checks.

And Cain’s selling point of “simplicity” is unraveling, as he’s now revealing that certain income groups and locales would be subject to different taxes.

A national sales tax is also a gamble. Unlike the flat tax, which has been embraced by numerous countries and produces undeniable results, the sales tax is a black box. Various studies show that 9-9-9 would significantly raise taxes on many, and reports conflict.

But at least Cain gets credit for suggesting something bold. The other major candidate in the race, Romney, is largely taking a status-quo position on taxes, as he is on many other issues.

Romney is suggesting various tax reform measures. Every candidate does. But it’s nothing on the scale of Perry and Cain. We need fundamental overhauling, not technocratic tinkering.

America’s tax code is counterproductive and a failed attempt at social engineering. It’s time for a bold plan proven to foster economic growth. It’s time for a flat tax.

Ken Blackwell

Ken Blackwell, a contributing editor at Townhall.com, is a senior fellow at the Family Research Council and the American Civil Rights Union and is on the board of the Becket Fund for Religious Liberty. He is the co-author of the new bestseller The Blueprint: Obama’s Plan to Subvert the Constitution and Build an Imperial Presidency, on sale in bookstores everywhere..

 

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[smoothsailing]

Perry’s Game-Changing Plan for Jobs and Growth

About the author:

 

Ken Blackwell, one of America’s leading conservative voices, is the author of Rebuilding America and is currently the Senior Fellow for Family Empowerment at the Family Research Council. He has served as Ohio’s treasurer, secretary of state, mayor of Cincinnati, undersecretary at the U.S. Department of Housing and Urban Development, and U.S. Ambassador to the United Nations Human Rights Commission. Co-chair of the Republican National Committee’s Redistricting Commission, he is on the board of directors of the National Rifle Association, the Club for Growth, National Taxpayers Union. In 2004, he was awarded the prestigious John M. Ashbrook award by the American Conservative Union and the AshbrookCenter for Public Affairs for his steadfast conservative leadership. Blackwell is a contributing editor for Townhall.com, and his columns appear in the Wall Street Journal, Washington Times, New York Post, American Spectator, American Thinker, and on NationalReview.com and FoxNews.com. He and his wife of more than forty years, Rosa, live in Cincinnati, Ohio.

[fightinJAG]

And Cain’s selling point of “simplicity” is unraveling, as he’s now revealing that certain income groups and locales would be subject to different taxes.

Oh, good grief.

If this is Ken Blackwell's definition of "complicated," he's spent too much time watching Oprah.

[smoothsailing]

I take it you don’t like Ken’s message. What do you know about Ken Blackwell? Do you think he has the background to be a credible advocate for the Perry Plan?

[fightinJAG]

So you’re okay with the Fedzilla tax code staying in place indefinitely (not just as a transition phase)? And with the fact that it can continue to be dorked with, and used for crony capitalism and corrupt funneling of other favors?

Personally, while a true flat tax is great, Perry’s plan is “optional” and it leaves in place the old system, with all its horrors.

Moreover, Perry’s plan does nothing to make more people stakeholders in the federal tax system -— and, thereby, to build in more political accountability. Rather, it builds in less, because it further balkanizes Americans in nontaxpayers, flat tax payers and Fedzilla tax payers. More groups for Congress to pit against each other!

I don’t see any fundamental advantage to this plan. And making it “optional” is weaselly when we need bold.

The Perry plan is like pain medicine: it makes the patient feel better for a while, but does nothing to help cure the patient.

The Cain plan is like chemotherapy: it will have some side effects a few people will be uncomfortable with for a while, but IT SAVES THE PATIENT.

How? Primarily because it increases the stakeholders in our system. Unless that happens, all any plan is accomplishing is rearranging the deck chairs in a very pleasant way for present taxpayers. In the meantime, the parasite class continues to grow . . . until one day, it’s GAME OVER.

[fightinJAG]

Retail outlets already account for state sales taxes, including the fact that many states have multi-tiered tax schemes (food taxed at one rate, etc.).

It sure hasn’t stopped states from collecting taxes.

I think modern computer software can handle this task.

Further, at least under 999, there would be NO withholding tax for the employer to account for.

[MrEdd]

[smoothsailing]

The plan may be a winner but Perry has no idea what it’s even about. Kind of like the slacker who gets the straight A student to write his term paper.

Silly statements aside, Perry has been far more adept at explaining his plan than Cain has been at explaining the ever-changing 9-9-9,9-0-9,3-3-3, Detroit Land of OZ Plan.

[fightinJAG]

I think was hardly a great article.

These jokers didn’t even address the elephant in Perry’s room: that he leaves in place the entire tax system we have now, complete with crony capitalism, corruption and the promise of more, since Congress and special interests will continue to have the Fedzilla code to use for their schemes.

Writing about Part I and ignoring Part II of a plan is not a great article, in my book.

It’s sloppy and intellectually dishonest.

[fightinJAG]

Bwwwaaahahahahahah: I notice in this interview that even Perry doesn’t address the fact that he’s not advocating a flat tax system, that instead he’s proposing a hybrid flat tax/Fedzilla tax code system.

Perry says: “I think you need to have a tax system that basically is flat, fair and simple.”

I guess he means he thinks we ought to have that OPTION.

And that anyone who wants to keep the old crony capitalism ballgame going, well, just have at it, because under the Perry plan the Fedzilla code remains in place indefinitely. And is STILL subject to modification by Congress (RUH ROH).

[hocndoc]

There's more in Blackwell's explanation: Those monthly "prebate checks" and a little matter of the Constitution.

Contrast Perry’s flat tax with Cain’s 9-9-9 plan. Parts of the plan—such as requiring two-thirds congressional approval to raise taxes—are clearly unconstitutional. Other parts—such as taxing state and local governments—are likely unconstitutional.

Even if modified to make it constitutional, 9-9-9 is not conservative. It creates the risk of permanently burning the candle at both ends with an income tax and a European-style value-added tax. And it either imposes punitive taxes on the poor, or makes then forever beholden to the central government with monthly “prebate” checks.

It's bad enough that Cain wants to bailout the inner cities which will empower the same corrupt Democrats that destroyed them in the first place. It's atrocious that Cain felt it necessary to call in the Black/"African American" race card in selling the Land of OZ. http://transcripts.cnn.com/TRANSCRIPTS/1110/13/ebo.01.html

I believe in empowerment zones. Most of the unemployed black Americans in this country are in these mostly economically depressed areas. It could be, and I'm only using this as an example, because we haven't finished establishing the parameters yet. Instead of in a designated empowerment zone, it being 9-9-9, it could be, as an example only, 3-3-3.

What this does, because you have a lot of African-Americans located in cities like Detroit, disproportionately, it would encourage businesses to stay in business there or to move there. It would encourage people to work there, because if you live in the empowerment zone, you're going to pay a smaller percentage in taxes.

[hocndoc]

What he’s proposing is a transition plan. It’s more likely to end up favored over the current system with the cuts in special interests that are in there, and it’s coupled with spending cuts.

Let’s wait and see if it’s revised as often as the 9-9-9/9-0-9/3-3-3 with OZ plan.

[fightinJAG]

Please.

Don’t cast my reasoned analysis in emotional terms.

It has nothing to do with who Ken is and, frankly, it’s a cheap shot to imply it does.

My analysis of the Perry plan is based on . . . wait for it, the Perry plan.

I’d be glad to engage any substantive comments you have on my analysis of the plan.

[shield]

Perry Ping....

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IF you'd like to be added FReepmail me. Thanks.

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[fightinJAG]

You still haven’t pointed me to anywhere in Mr. Blackwell’s article where he discusses the fact that Perry’s plan is a hybrid of flat tax/Fedzilla code.

[fightinJAG]

What he’s proposing is a transition plan.

What's your source for that?

I read the plan closely and looked all over Perry's website. I did not see anywhere where the old system remains only in a transition phase.

It's pretty clear the old system remains forever under the Perry plan. Otherwise the flat tax part of it would not be "optional."

I am aware that other freepers have argued, based on their own views, not on anything Perry has said, that the Fedzilla code will just die on the vine because the flat tax will be so popular.

Good grief, that's the last thing that will happen! First, the Fedzilla tax code will never die unless it is killed. Secondly, as an option that applies to even fewer taxpayers, Congress and its cronies will be able to extend and entrench and have an even bigger heyday (and corrupt payoff) with the Fedzilla code.

And if they raise the flat tax rate [hey, where are the people complaining, "yeah, right, the flat tax rate could go from 20 to 30 to 90"?], Congress will say "if you don't like it, pay the Fedzilla rate!"

Then they'll raise the Fedzilla rate and say, "if you don't like it, pay the flat tax rate!"

In the meantime, the Perry plan has done ZERO to stop the growth of the parasite class by making them pay at least some taxes.

[smoothsailing]

Please. Don’t cast my reasoned analysis in emotional terms. It has nothing to do with who Ken is and, frankly, it’s a cheap shot to imply it does.

Maybe in your world saying Ken Blackwell may have "spent too much time watching Oprah" is reasoned analysis. To me, it looks suspiciously like one of those "cheap shots" you ascribe to others.

[casinva]

smoothsailing,

If I could copy and paste that entire article again right here, I would do that! Every single sentence in that article was very important, and none of those details mentioned should be overlooked.

However, since it is probably best not to just copy and paste the entire thing again, I will at least share one of my favorite parts. It is one of the parts that gets me really excited, and only one of them, but in the name of time and space...... Well, you know! LOL

From the article:

Perry also extends this 20% rate to corporate taxes. This will make America significantly more competitive in the global economy. Temporary incentives will also draw perhaps a trillion dollars from abroad back home.

I had just mentioned in another thread, and I'll mentioned it here too, that Perry's Cut, Balance and Grow package is an entire comprehensive economic reform platform, and a big part of that reform is cutting our federal government's strongholds on economic growth while making our country competitive and our country's entire financial picture strong, perhaps stronger than ever before when you add the SEPARATE Energy Production / Energy Independence plan alongside his Cut, Balance and Grow economic reform package.

This candidate is going for growth and vitality, and he's going for something so big I don't think we are even getting the "just" of it all yet.

And the coolest thing of all? He's doing it all with a combination of Tea-Party-fiscally-conservative measures right alongside a courageous belief in what America is able to do when you set her people free.

I am proud to be a supporter of Governor Perry because I want our country to have what it is capable of with his vision, with his principles, and with his leadership.

[hocndoc]

No one else seems to be using your word, or especially concerned about the option.

Certainly not Cain, with his evolving #-#-# plan, nor Gingrich, who calls for the same “option.”

“Might be,” “may,” and “if” can be used against any plan, including Cain’s, Gingrich’s, and Romney’s. (although the tweaking of Cain’s empowerment/opportunity/3-3-3 zones, comes closest)

[TennTuxedo]

Perry lost my support the moment he made the “heartless” comment. I will not vote for him no matter what he does.